Up-to-the-minute advice, information, resources, and, on occasion, commentary on federal and New Jersey state income taxes, and the various New Jersey property tax rebate programs, and insights and observations on tax policy and professional tax practice, by 40-year veteran tax professional Robert D Flach.

Tuesday, July 16, 2013

WHAT’S THE BUZZ, TELL ME WHAT’S A HAPPENNIN’ - TUESDAY EDITION

“You can lead a man to Congress, but you
can’t make him think.” Milton Berle

“Not always, but quite often, getting married
means taking your partner's last name. It is important that your name and the
Social Security number that you put on your tax return matches your Social
Security Administration records. So if you’ve changed your name, you need to
report the change to the SSA. The easiest way to do that is to go to their
website - SSA.gov - and file Form SS-5, Application for a Social Security Card.
You can also do this by visiting your local SSA office.”

* “Ohio Tax Man Giveth, then Taketh from Gamblers” from TAXES IN THE BACK may identify
the source of the erroneous rumor about deducting gambling losses on the
federal return that I mentioned in an earlier BUZZ (highlight is mine) -

“Gambling losses are no longer deductible as
an itemized deduction for purposes of
the Ohio income tax, effective immediately.”

“The IRS would like the public and Congress
to believe that if every preparer were regulated by the IRS that preparer tax
fraud would magically vanish. The reality is that as long as money is involved
in an industry–and there’s always money involved with tax preparation–some
preparers will be tempted to commit tax crimes. The fact that they are an
attorney, CPA, EA, or RTRP won’t change the reality that money always tempts
criminal activity.”

As I
have continually pointed out – the authors of the Enron tax fraud, which
started the debate on tax preparer regulation, were CPAs.

Along
the same lines as Russ’ post (again as I have continually pointed out) –
forcing tax preparers to sit through 2 hours of ethics preaching (which in
reality ends up being closer to 4 or more hours – I will explain if asked) each
and every year ain’t going to turn a crooked preparer honest!

The
purpose, and benefit, of a tax preparer credential designation, which CPA or JD
is definitely not, and which should be voluntary and not mandatory, is not to stop fraud, but to indicate to
the taxpayer public that the holder is competent and current in 1040
preparation.

“The
IRS alerted taxpayers and tax professionals about an interest calculation error
on certain notices mailed the weeks of July 1 and July 8.

The
IRS discovered errors in the CP2000 notices during a two-week period this July.
The notices contained an incorrect calculation on the interest owed on proposed
taxes from under reported income. The interest figures were lower than they
should be. The IRS has corrected the issue for future mailings.”

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